2018
FINANCIAL ACCOUNTING
- I
Paper: 1.2
Full Marks – 80
Pass Marks - 24
Time – Three Hours
The figures in the
margin indicate full marks for the questions
Answer either in
English or in Assamese.
1.
(A) Fill in the blanks: 1x5=5
1)
Under Sectional Balancing System, Trial Balance
can be prepared for _______ ledger only.
2)
In case of Instalment System, total interest
receivable by the seller is credited to _______ Account.
3)
Equity + Long-term liability = Fixed assets +
Current assets – _______.
4)
In case of Hire Purchase, Asset Account is
debited with _______ price.
5)
Recoupable shortworking are shown in the Balance
Sheet as a _______.
(B) State whether the following statements are true or
false: 1x5=5
1)
It is on the basis of ‘Going concern concept’
that the assets are always value at market price.
2)
‘Separate entity concept’ is not applicable to
company.
3)
The cost of goods sold on Hire purchase is
transferred to Purchase Account.
4)
The landlord receives a minimum rent as royalty
periodically.
5)
Royalty Suspense Account shows a credit balance
in the books of the landlord.
2.
Answer the following questions: 2x5=10
a)
Mention two roles of Accounting Standard in
preparation of financial statement.
b)
Why are adjustments necessary in the Self
Balancing System?
c)
Write two advantages of Sectional Balancing
Ledger System.
d)
Mention two types of rights one may acquire
after payment of royalty.
e)
What is meant by ‘Down Payment’ in Hire Purchase
System?
3.
Answer the following questions: 5x4=20
(a) “Money
measurement concept limits the scope of accounting.” Comment.
Or
Discuss the functions of International Accounting Standard
Board.
(b)
Give rectification entries under Self Balancing System for the following
transactions: 2.5+2=5
1)
Sales Day book under cast by Rs. 750.
2)
Return inward from Rakesh of Rs. 1,500 is
recorded in the Day book as Rs. 15,000
Or
Explain with examples how the Sectional Balancing System
works. 5
(c)
Write a brief note on the special features of Instalment Purchase System. 5
Or
A seller sold a car on hire purchase system, the cash price
of which was payable as Rs. 12,000 down payment and the balance in 3 equal
annual instalment together with interest @ 10%. The amount of instalment
including interest was Rs. 17,600. Determine cash price of a car and interest for each year. 5
(d)
State the importance of minimum rent in a lease agreement. 5
Or
A company has taken a lease of mine at a royalty of Rs. 5
per ton of coal raised with a minimum rent of Rs. 30,000 p.a. having a right to
recoup shortworking within next 2 years of its occurrence subject to a maximum
of Rs. 5,000 p.a.
The outputs of first five years are given below:
|
First year
Second year
Third year
Fourth year
Fifth year
|
4,000 tonnes
4,500 tonnes
8,000 tonnes
8,200 tonnes
5,500 tonnes
|
Prepare a Royalty Statement. 5
4.
What is Accounting Standard? Write the procedure of setting Accounting Standard
in India. 2+8=10
Or
Explain with illustration the accounting principle substance
over legal form and principle of full disclosure of Accounting. 5+5=10
5.
From the following particulars, prepare the Total Debtors Account and Total
Creditors Account: 5+5=10
|
2017
|
|
Rs.
|
|
Jan. 1
|
Balance of Sundry
Debtors
Balance of Sundry
Creditors
Transactions during
the year:
Credit Purchases
Credit Sales
Cash Sales
Paid to Creditors
Discount allowed by
them
Cash received from
Debtors
Allowed them
discount
Bills payable
accepted
Bills receivable
received
Return inwards
Return outwards
Rebates allowed to
Debtors
Rebates allowed by
Creditors
Provision for
Doubtful Debts
Bad debts
Bills Receivable
dishonoured
|
16,000
18,500
4,500
9,800
1,500
9,875
325
7,800
200
1,500
3,000
875
600
275
150
320
450
375
|
Or
From the following details, write General Ledger Adjustment
Accounts under Self Balancing System as on 31st December, 2017: 5+5=10
|
2017
|
|
Rs.
|
|
Jan. 1
Jan. 1
Jan. 1
|
Debtors (Dr.)
Debtors (Cr.)
Creditors (Cr.)
Creditors (Dr.)
Transactions during
the year:
Purchase
Sales
Cash paid to
Creditors
Bills received from
Debtors
Bills dishonoured
Bills Payable given
to Creditors
Discount allowed to
Debtors
Discount allowed to
Debtors but later on disallowed
Cash received from
Debtors
Discount received
from Creditors
Cash paid to Debtors
Transfer from
Debtors ledger to Creditors ledger
Cash Purchases
Cash Sales
Bad debts written
off
|
18,000
400
27,000
250
50,000
78,000
21,000
9,000
300
7,500
250
50
8,900
450
25
1,200
4,500
7,500
250
|
6.
Kusum Ltd. bought a plant on January 1st, 2016 on the following hire
purchases terms:
1)
An initial payment of Rs. 40,000 payable on or
before delivery and
2)
Four half-yearly payments of Rs. 30,000 each
commencing from June 30th 2016. In arriving at these terms, the
plant manufacturers computed interest at 6% per annum with yearly rests.
Kusum Ltd.
provides depreciation at the rate of 8% p.a. on cost. You are required to show:
the accounts
in the books of Kusum Ltd. for the year ended 31st December, 2016
and 31st December, 2017 necessary to record the above transactions. 10
Or
A. K. Enterprise purchased on instalment system a machine
from R. K. Enterprise on 1st January, 2015 for a sum of Rs. 80,000. Rs. 20,000 is to be paid on
signing of the contract and rest in three annual instalment of Rs. 20,000 each.
The cash price of the machine is Rs. 74,500 and interest is charged by the
vendor at 5% p.a. the buyer charges depreciation at 10% p.a. on the diminishing
balance method.
Prepare Machinery Account and R. K. Enterprise Account in
the books of A. K. Enterprise. 10
7. P
Ltd. took a mine on lease from the landlord T Ltd. with effect from January 1st,
2008 for a period of 20 years at a given rate of royalty with a minimum rent of
Rs. 12,000 per year. Each year’s excess of minimum rent over royalties is
recoverable out of royalties for the next two years. In the event of strike the
minimum rent was to be reduced proportionately, having regard to the length of
the stoppage. But in case of lockout, it was provided that the actual royalties
earned for the year would discharge the full rental obligation for that year.
The
results of the workings were as follows:
|
Year
|
Actual royalties
(Rs.)
|
|
2013
2014
2015
2016
2017
|
13,000
8,000
10,000 (strike for 3
months)
8,000 (Lockout)
15,000
|
The balance of shortworking account as on January 1st,
2013 was Rs. 5,000, of which Rs. 3,000 relates to 2011 and balance in 2012.
Prepare Royalties Account and Landlord’s Account in the
books of P. Ltd. 5+5=10
Or
Nibir Ltd. owns certain patent rights. It has granted a
licence to Ashok Ltd. to use such rights on royalty basis. The royalty is
payable at Rs. 50 per unit produced. Ashok Ltd. has issued a sub-lease to
Kanika Ltd. on the basis of a royalty of Rs. 60 per unit sold. The minimum
royalty payable by Kanika Ltd. is fixed at Rs. 75,000 p.a. Shortworking can be
recouped within one year from the last date of the year in which they occur.
The following particulars are for the first three years of
working:
|
Ashok Ltd.
|
Kanika Ltd.
|
|||
|
Year
|
Sales
(units)
|
Closing Stock
(units)
|
Production
(units)
|
Closing Stock
(units)
|
|
1
2
3
|
6,000
7,500
13,500
|
1,500
3,000
4,500
|
600
3,000
4,500
|
300
600
1,350
|
You are required to prepare Royalty Receivable Account and
Royalty Payable Account in the books of Ashok Ltd. 5+5=10
***
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